OMG Did U C What U R Paying 4 Texting? 721
theodp writes "If you thought gas prices were rising too quickly, writes CNET's Marguerite Reardon, check out what's been happening to text messaging. Since 2005, rates to send and receive text messages on all four major carrier networks have doubled from 10 cents to 20 cents per message. If the same pricing was applied on a per-byte basis to a single MP3 song download, it would set you back almost $24,000 according to one estimate. So why are carriers gouging their customers so? Because they can, concludes Reardon."
Some data 4 U (Score:4, Informative)
I was recently reading about the whole George Vaccaro [blogspot.com] fiasco and did some calculations on how much the cost of transfer is over a T1 line vs. what companies like Verizon charge for data transfer. Its astonishing that people put up with this:
Why do people put up with this? Some people might say I'm comparing apples to oranges, but Apples dont' cost 17,000 times more than oranges. There should be a class action suit over this.
Whoops, sorry (Score:4, Informative)
The 40,687,488,000 should actually be 517,602.528.0 I made a mistake the first time I did this and corrected the prices, but didn't correct the rest of the comment. The rest of it is right.
Something should be done (Score:4, Informative)
In the UK, the Telecom Regulator OFCOM recently (as in a few days ago) started pushing our mobile operators to reduce the cost of sending and receiving text messages while abroad, where the price was often around 30p (60c!) or more just to send one.
I hope this sets a precedent and they start to clamp down on the cost of sending regular, local messages as well.
Re:Is this really an issue? (Score:3, Informative)
actually, with the new plan from AT&T with the 3G IPhone, the price for unlimited texting is $20/month. See here [att.com].
Just to compare (Score:5, Informative)
In Norway, NOK0.59 is a pretty average price to pay, which corresponds to about $0.012 using todays rates. Furthermore, many companies give you 100+ free messages per month. With my own usage pattern, I keep my cellphone for free (No monthly charge, 120 mins of calling and 90 sms for free per month). Stiff competition does wonders :) If companies in Norway can do this, I'm sure it would be possible in the states too, as long as the consumers keep up the pressure.
Re:Texting vs. Hubble (Score:5, Informative)
A professor at my university was recently asked by a British TV program to calculate the cost of retrieving data from the HST, and it came out quite a lot cheaper than sending text messages.
From the physorg article [physorg.com]:
Dr Bannister estimated the cost of the data from Hubble could vary between £8.85 and £85 per MB- much cheaper than the £374.49 per MB cost of transmitting one MB of text.
Paying to receive (Score:1, Informative)
You poor saps in the US are apparently even willing to pay to receive text messages! So unless you often talk to yourself, double the price quoted per text sent to get a more realistic figure.
To people in Europe a system like the one in the US would be totally ridiculous. I don't have a plan for my phone at all, and I have a few hundred free texts per month, with no cost to send or receive them to anywhere in the world.
The potential for abuse alone should be enough to damn the practise - if I know your number and you can receive texts, there's literally nothing stopping me from sending you 50 dollars worth of costs to you at no cost to myself. I could even schedule it to be done automatically for god's sake!
Re:Some data 4 U (Score:5, Informative)
Okay, now remember that you need a cell tower in every area you want coverage. Now remember that you need to wire up all of those cell towers. Comparing the cost of a single T1 to that is insane.
Not really - most of the towers are not owned by the cell company but by one of a couple of twoer companies who lease antenna space; so you'd need to add in lease costs.
I'd argue they are fixed costs rather than variable so they should not be considered when calculating the cost of sending the n+1 txt msg; and while the bandwidth cost is probably more of a fixed cost as well I'd say that since it limits carrying capacity more than the antenna (as far as I know)it's not a bad estimation of the marginal cost associated with a txt msg or other data transfer.
Re:Calculate based on Asian figures (Score:3, Informative)
Try this on... (Score:5, Informative)
Texting prices in .dk: ~5 cents and falling. Yay free market economy! The US should try it one day.
Re:Some data 4 U (Score:2, Informative)
Not when you have oligopolies (Score:5, Informative)
You started the economics discussion, so here comes ECON 102.
There are only a small number of wireless carriers. Therefore an oligopoly exists. The demand curve for oligopolies is "kinked." This means above a certain point customers will rapidly stop buying, but below this point buyers will not start purchasing in drastically greater numbers. This means that the oligopoly will set a price point right at the kink in the graph.
What does this mean?
1) A section of the populace feels txts are necessary, and demand is inelastic. This is the lower half of the demand curve. This means a change in price does affect demand significantly.
2) An increase in population of that subset of people changes the demand curve, and moves the kink in the graph higher on the price axis. A price increase ensues. The oligopolies charge exactly the price they can get away with because market dominance allows them all to effectively charge the same prices easily. One carrier changes, the rest change to follow.
3) To stop this pattern, you don't have users reduce demand, you have to break the oligopoly, because lack of competition means that prices don't follow standard supply and demand.
Verizon only: Block TXTs from the Web, reduce spam (Score:2, Informative)
For Verizon, you can block TXTs sent via email and the web. After doing this, I haven't received any spam. To do this, go to www.vtext.com and login with your verizon account.
Then, under Preferences > Text Blocking, select the options to block all messages sent via the web and email. Since my friends all text me from their phones, this is not a problem.
Re:Some data 4 U (Score:5, Informative)
No they will not. AT&T will NOT disable incoming texts.
you can easily bankrupt an ass-hat by having thousands of SMS messages sent via the net to them. AT&T will NOT block the incoming they claim they dont have the ability.
and yes this has been tested, I saw it happen to a business colleague. He kind of deserved it and the only solution was to have AT&T add a unlimited messaging plan to his phone for $29.95 a month. Otherwise he was having an extra $280.00 a month on his phone for the incoming spam and prank messages that was being sent by several hundred computers from all over the planet.
Re:Some data 4 U (Score:2, Informative)
A winner! (Score:3, Informative)
I'm really surprised that more people haven't worked this out.
I have unlimited Internet, so I just log in to Google Talk and anyone can message me that way.
For messaging with the spouse, I use BlackBerry Messenger, because it's reliable and works even if she forgets to log in.
Re:Some data 4 U (Score:3, Informative)
Unless you have an unlimited incoming plan that starts at $25+ with Telus (don't know for the other carriers) Your paying for incoming calls.
Land line calls incoming and outgoing are free as long as the outgoing call isn't long distance so that's how they justify it.
Re:Some data 4 U (Score:4, Informative)
Have you ever sent a text message, then found out that it didn't get to the recipient until the next day? For crying out loud, if you're going to charge an arm and a leg for me to send a message, and again for someone else to receive it, all in the name of "convenience", then just make sure it gets there within a minute or two!
Re:Some data 4 U (Score:3, Informative)
Re:Some data 4 U (Score:1, Informative)
Verizon blocked my text messages (I'm supposed to get 300 a month included with my cell phone service) after I demanded it. The CSR swore they couldn't do this, but I said 'figure out a way, because I'm not paying for text messages from people I don't even know.' I was really po'ed, as the first day I was using my new cell phone (same account for 12 years with verizon, same phone number and account, just a new phone) I started getting bombed with text messages and spam. I've never had a problem with unsolicited text messages coming through my T-Mobile data account, but I'm not sure if they have an option to block text messages.
Re:Some data 4 U (Score:3, Informative)
I don't get why US people put up with the receiver of a call or txt paying. It's absurd to me. Does the receiver of a letter pay? No. So why does the receiver of a call or txt pay??
Two reasons, both of them quite sensible.
The first is that the US had significant cell phone use back when they were really expensive. If it's 1980 and I'm calling Mr. Hotshot on his carphone at a buck-fifty a minute, who should pay? Me, or Mr. Hotshot?
The second is that I don't need to know whether I'm calling a cell phone or not. It costs me the same either way. No need to memorize which numbers are mobile and which aren't. If I know what kind of phone I'm using, I know what my rate structure is. The recipient of my call knows what kind of phone he's using, and he knows what his rates are. We don't have to care about each other, we just talk.
The third (yes I said there were two) is that it's just fucking common sense. Remember, it's not "called party pays", it's "mobile party pays". Pays for what? Mobile service. You mean... the person with the cell phone pays to use the cell phone? Why, yes!
Re:Some data 4 U (Score:3, Informative)
I'm on tmobile prepaid. At one point I thought the same thing as you, but earlier this year I had some problems with text messages and found out that (at least for prepaid) you CAN disable text messages. Of course, I just spent 15 minutes looking for where on the website it was and I can't find it (one of their phone reps walked me through the process). But it's there in that mess, somewhere. It was a bit primitive, but you could set up different filters based on from or subject lines, etc, or just disable them altogether.
Re:Some data 4 U (Score:5, Informative)
Re:Monopoly? Oligopoly? (Score:3, Informative)
First of all, it's anything but cheap. Phone networks are pricy. It's not something where you invest your 10k and start a business, which is quite possible in other areas. Think more around 100m for a small size start.
Second, you need contracts with other networks. First of all, because some countries don't like the idea of setting up phone towers all over the place, so you don't get the OK from the government to build one. Then your customers need to be able to call other networks, or you won't have many. All a major network has to say to kill your business immediately is simply "no". It's no huge loss for them, since you don't have that many customers to really hurt their revenue.
This actually happened to a smaller phone company here, and behold, they're gone today. No place to put up a tower because there are already too many around (according to the governments, how much of this argument is due to kickbacks is debatable...), no peering with other networks. Now try to build a customer base.
It's really a good thing! (Score:5, Informative)
Cellular carriers give out free or subsidized phones as a method of keeping their customers signed up for long contracts. They keep a stranglehold on the equipment to further that.
However, by law when a carrier makes a material change mid-contract their customers, *all* their customers get a get out of contract free 30 day window. It's a great deal and you should exercise your rights when a carrier changes *anything* whether the change affects you or not.
So now that you know you are gaining important new rights that you didn't have before they raised the text message rates you can take advantage of that. You don't have to stop using the service, you can probably just cancel the agreement, though they may deny that. If they do just hang up and call back, it costs cellular carriers over $400 to acquire a customer, they don't want to lose you even month to month though they may deny that. So you're now month to month and can threaten to leave unless they give you another free phone. Heh.
FWIW I have done this. There was much gnashing of teeth at the cell carrier. Uh-oh. A customer who has actually read the contract!
Re:Some data 4 U (Score:5, Informative)
Yes they will. They've done it for me and apparently for some other posters. It seems not to be a default configuration and you may have to shuffle through some folks until someone has a clue, but it can be done.
Keep trying.
Re:There's a good reason we pay for incoming calls (Score:4, Informative)
Wrong!
I live in Ukraine where ALL incoming calls are free by law. So cell companies HAVE to compete on outgoing call rates. And the do compete - I see a lot of advertisements like: "0.1 cent for all calls!".
Also, the stupid '300 minute a month' plans are also US specific. Most plans here are of debit 'pay-as-you-go' type. For example, I pay about $20 a _year_ because I just don't talk much other the phone.
Re:Some data 4 U (Score:5, Informative)
What was the justification for such a system? Surely it must be an entirely unintended side effect of some other short-sighted but at least sane idea?
In the US, there is are no dedicated prefixes for mobiles. A 415 number could be a landline in San Francisco, or it could be a mobile over there, or even a mobile from that area currently in Zimbabwe. The sending party can't possibly know this and might expect (when also in SF) to pay as little as zero, when also in SF and placing a free local call. Therefore, the receiving party pays, having full knowledge about the phone type (landline/cellular) and its location.
In Europe this is quite different: mobiles have dedicated prefixes. The sending party now knows to be calling a mobile and to get charged differently. Only when the receiving party is roaming (e.g. in Zimbabwe) it pays for receiving a call - the sending party pays up to the border.
These differences between Europe and the US have always existed for voice calls and simply continued to be when it comes to SMS.
With most European providers you don't even pay for receiving text messages even when roaming, precisely because there is no way to reject them.
(I know this why? Well, I have a landline number here in Holland, a mobile number here in Holland and one for the UK, as well as VOIP-redirected landline leases in San Francisco and London. And I've previously had mobile numbers in the US, Uganda and South Africa.)
Re:Some data 4 U (Score:2, Informative)
As of August 1st, Bell mobility is going back to treating incoming messages as if they were outgoing messages with regard to cost. If you have no texting plan, it's $0.15 per incoming. If you've got a limited monthly amount of texts, it's deducted from that limit. Only unlimited texting plans aren't affected. I got a snailmail letter a few days ago telling me this was necessary "due to increased costs". Also, international texts, (non-Canadian and non-US) will go up from $0.20 to $0.25.
I also hope for some new fresh competition in the mobile market. My Aliant service was relatively non-frustrating, but once they were completely bought by Bell things just went downhill. My sister's had good experience with Virgin's prepaid plans. I'm debating a switch to them. If I can bring over my unlocked-and-open-run-any-java-app-use-any-mp3-as-ringtone-thank-you-Diego-3.08 nokia phone, I'll definitely switch. Fewer monthly minutes, but no contract and no cancellation fees. My personal freedom is worth the tradeoff.
Canada (Score:3, Informative)
Checking Telus' site, it looks like they're not currently charging for incoming text anymore, but are planning to change back to doing so on Text messages received from another mobile phone are free to receive until August 24, 2008 [telusmobility.com].
Re:Try this on... (Score:3, Informative)
UK £0.05 per text, no contract. That's $0.10.
I can also text land line phones and a computer reads them out. How would that work in the US where you pay to receive texts?
lol@pay to receive.